Brown, Warren show sharpest differences on taxes

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Senator Scott Brown’s proposals focus on lowering the overall tax rate and closing loopholes, while his Democratic challenger, Elizabeth Warren, has proposed raising taxes on those earning more than $250,000 a year.

While the candidates agree on some issues and downplay their differences on others, the tax battle raging between them reflects their starkly different visions of how much the government should take from its citizens.

Warren’s tax plan mirrors President Obama’s, almost to the letter, while Brown’s dovetails roughly, though not entirely, with Mitt Romney’s plan, which calls for specific cuts — like a 20 percent reduction in marginal rates — that Brown has not endorsed.

Warren, like Obama, has made tax increases on upper-income Americans a central plank of her campaign, calling those increases a matter of basic fairness and a means to finance jobs for teachers, firefighters, police officers, and construction workers.

The Harvard Law School professor has endorsed increased taxes on income, dividends, capital gains, estates, investment, and other areas, with all of the increases focused on those who make more than $250,000 a year.

Her changes would bring the federal government more than $1 trillion in additional revenue over the next decade.

“What I believe is that everybody pays a fair share,” Warren said during the last debate, in Springfield. “And that means the millionaires, that means the billionaires, that means the big oil companies. And then we make those investments in the future.”

Brown has pledged to oppose tax increases and has said he wants to lower rates and eliminate deductions and loopholes.

However, he has not released a specific plan that details which rates he wants to lower and which loopholes and deductions he wants to close.

Brown argues that by not being pinned to specifics, he leaves himself open to negotiations on a broad tax reform package.

He also avoids the kind of scrutiny that any politician faces when they provide detailed tax proposals.

In the Senate, Brown has voted against Democratic measures to increase taxes on upper-income earners and on oil companies, votes Warren repeatedly cites to accuse the senator of protecting “millionaires and billionaires.”

Brown argues that tax hikes would harm businesses, particularly at a time of economic uncertainty.

“The one thing we can’t be doing right now, in the middle of this 3½-year recession, is taking more money out of people’s hard-working pocketbooks and wallets and giving it to the federal government,” he said at the last debate. “They’re like pigs in a trough up there. They just take and take and take.”

Nevertheless, Brown voted to end a $6 billion tax subsidy for the ethanol industry, a vote he says shows he is willing to eliminate some special tax breaks, despite his pledge to Norquist’s group, Americans for Tax Reform.

Brown also pushed to repeal a 3 percent withholding tax for government contractors and to give a tax credit to businesses that hire unemployed veterans. Obama signed both measures into law last year.

Brown’s agenda, however, focuses more on knocking down tax increases than on offering major changes in the tax code. This week, for example, he has been attacking Warren for supporting Obama’s health care law, which includes a menu of taxes. Brown wants to repeal the law.

Both candidates’ positions reflect the deep partisan divide in Congress. Roberton Williams, who served in the Congressional Budget Office from 1984 to 2006, said that Warren, with her emphasis on taxing the rich, and Brown, with his opposition to tax increases, are both unrealistic about the long-term need for revenue.

“You can’t cut spending enough without getting into the muscle and bone,” said Williams, a senior fellow at the Urban Institute in Washington. “And there’s not enough money in the rich to fund the kinds of things we want to do.”

The centerpiece of Warren’s plan is her call to let the George W. Bush-era tax cuts expire for upper-income earners, which would result in higher taxes on incomes, capital gains, and dividends for individuals earning more than $200,000 and couples earning more than $250,000 — roughly the top 2 percent of taxpayers.

Warren, like Obama, also wants to end tax subsidies for the oil and gas industry.

Brown argues that higher taxes on oil companies would be passed on to drivers in the form of higher prices at the pump and to homeowners in the form of higher home-heating costs. Like Romney and other Republicans, he also contends that letting the Bush tax cuts expire for upper-income earners would create an unnecessary drag on the economy.

“That 2 percent you’re talking about are people that are actually out there creating jobs,” Brown said at the last debate. “A substantial amount of . . . people are actually hired by those job creators.”

Brown has also has seized on several of Warren’s public statements to accuse her of supporting $3.4 trillion in tax increases over the next decade. That figure, however, includes major tax hikes that Warren says she does not support and that are not part of her agenda.

For example, Brown pounces on a statement that Warren made last year, when she said that raising the cap on wages that are taxed to pay for Social Security would permanently stabilize the program.

Brown uses that comment to argue that Warren supports $1 trillion in additional Social Security taxes.

Warren’s campaign says she was only making a hypothetical statement and does not back higher taxes on Social Security.